Queenstown was one of the most expensive places in New Zealand to buy a house, with a mix of challenges that held back growth and development, Twyford said.

''We need to fix it, for economic reasons and for people's quality of life. The affordability of housing is a critical factor in an area.

''We're announcing today that Labour through the Kiwibuild policy will be building 750 to 1000 homes for first-time buyers in Queenstown.''

The policy is billed as the largest public housing programme – a $1.7 billion drawdown – in decades but it will be some years before the first sod is turned, Twyford said.

''It's a recognition we have a housing crisis and different places have different causes. We're not building enough houses. The shortage of demand drives up prices, one of Labour's responses to that is to roll up our sleeves and build houses.

''By the time the first 10 years is up that $1.7 billion [loan] ends up fiscally neutral for the taxpayer.''

A policy to build up to 1000 homes in Queenstown – often ranked as the second highest place for house prices in New Zealand after Auckland – was a recognition of the resort's lack of affordability.

Construction, planning and development was likely to take a few years, while the guide price at this stage was $300,000 to $400,000, he said.

''We expect it to take a couple of years to crank up. It'll be a big change to the way we build houses. They will be sold at market price but we are going to make big cost savings [in construction].

Twyford said a public reform was also on the cards in the guise of a healthy homes guarantee - a policy to compel landlords to set minimum standards for rentals, such as insulation, a woodburner and heatpumps.